lowest oil prices for 12 months!! why still the increase?

customer1_2

Why not write to your supplier, or to Ofgem at 9 Millbank, London SW1P 3GE – you could say something like the letter below (and you could even add a graph showing the 50% reduction in the price of oil - see www.thisismoney.co.uk/oilprice - and click on ‘SEE THE LATEST BRENT CRUDE OIL PRICE’) :

Dear XYZ

GAS AND ELECTRICITY PRICE INCREASE DESPITE FALLING OIL PRICE

In summer 2008 all the energy companies increased the price of gas and electricity by up to 35%.

The price of oil is now lower than it was a year ago, having fallen steadily by almost 50% since the price increase to customers in July 2008, and it looks set to fall further (www.thisismoney.co.uk/oil-price).


Paste the graph in here


Oil Price Oct 2007 – Oct 2008

On 10th October the Prime Minister Gordon Brown said: “Falling oil prices must be passed directly to energy customers in Britain. This has to be reflected in fuel bills”.

The current pricing is unacceptable. The energy utility companies do not act competitively, they act in unison, keeping prices universally high in the knowledge that everyone needs to buy energy.

When will the energy utility companies pass on the 50% price reduction to customers?


Yours faithfully

Cardew

customer1 wrote: »

Why not write to your supplier, or to Ofgem at 9 Millbank, London SW1P 3GE

The energy utility companies do not act competitively, they act in unison, keeping prices universally high in the knowledge that everyone needs to buy energy.

Ofgem have just published a 200 page report(there are 2 threads currently running on this report) saying exactly the opposite to your claim i.e. no cartel, there is genuine competition etc etc.

The all party Parliamentary Committee on Energy reached the same conclusion.

Could 'acting in unison' be because the costs the companies pay for energy from their various sources all increase at the same time?

Whilst the more 'knowledgeable' posters on MSE are never going to accept any finding that disagrees with their firmly held convictions, I suggest writing to Ofgem and telling them that they are wrong, will not do much good.

Perhaps a letter to The Sun or Daily Mail might get more response? They are never afraid to let facts get in the way of a headline;)

michaels

Hello?

No one argues when a market trader buys apples for 50p kg and sells them for more or is surprised when if the price he pays for them goes up that he puts his price up.

So why is it when the energy retailers have to pay more for the gas and electricity they buy everyone claims it is unfair when they put up prices to the public? Mech linked to some graphs showing that wholesale gas prices have gone up and not yet fallen but people keep writing that the price of oil has fallen so retail gas prices should be reduced. It is like saying that the wholesale price of oranges has fallen so the market trader should cut the price of apples - the arguement makes no sense to me (even though I don't work in the city or the energy industry)

Mazio_2

michaels wrote: »

Hello?

No one argues when a market trader buys apples for 50p kg and sells them for more or is surprised when if the price he pays for them goes up that he puts his price up.

So why is it when the energy retailers have to pay more for the gas and electricity they buy everyone claims it is unfair when they put up prices to the public? Mech linked to some graphs showing that wholesale gas prices have gone up and not yet fallen but people keep writing that the price of oil has fallen so retail gas prices should be reduced. It is like saying that the wholesale price of oranges has fallen so the market trader should cut the price of apples - the arguement makes no sense to me (even though I don't work in the city or the energy industry)

Thats because the energy companies and the media banged on about the price of gas being linked to the price of oil when it was going up and I dont believe one spokeman from any of the utility companies has even hinted that the price will fall if the oil price remains at this (or keeps falling) yet they were warning people of a 70% increase and putting 2 jumpers on why arent they telling us we can shortly go round nude now!

The other problem is over greed for the shareholders and managers just as with the problems with the banks is paramount over sensible decisions and people are sceptical of anything these mainly foriegn companies make because they will inevitably post billions in profit (unless we have a very mild winter then only millions).

The cartel theory is also rather poor when you only have a few companies then it becomes rather easy to fix prices to within reason without too much contact with each other.

This is only my own theory and I do not have masses of statistics or will I link to a graph or anything as alot of info can be distorted to suit the argument from both sides (just as the banks would have had projected profits from subprime).

The prof will be in the amount of profit they post and how much of it they reinvest into the UK utility infrastucture.

Cardew

Mazio wrote: »

The cartel theory is also rather poor when you only have a few companies then it becomes rather easy to fix prices to within reason without too much contact with each other.


The prof will be in the amount of profit they post and how much of it they reinvest into the UK utility infrastucture.

When Gas and electricity was privatised, loads of companies jumped in thinking it would be easy profit, and the competition was too fierce, and gradually they all pulled out of 'the game'.

The company profits are a matter of public record, and are certainly not high in percentage terms.

Look at the non-profit making Ebico. They are not competitive for the majority of consumers. Surely if excess profits was the reason for our high energy prices, then they would undercut all the Big 6 and we would all move to Ebico.

DGJsaver

KimYeovil wrote: »

Not true. Every singleton over the age of 60 is entitled to £500 per month (after housing costs are paid for.)

Link please Kim , i know about the £400 one off payment....?

1carminestocky

Cardew wrote: »

When Gas and electricity was privatised, loads of companies jumped in thinking it would be easy profit, and the competition was too fierce, and gradually they all pulled out of 'the game'.

The company profits are a matter of public record, and are certainly not high in percentage terms.

Look at the non-profit making Ebico. They are not competitive for the majority of consumers. Surely if excess profits was the reason for our high energy prices, then they would undercut all the Big 6 and we would all move to Ebico.

You keep banging on about this 'theory' but always forget to explain that Ebico get their gas/electric from one of the Big 6 suppliers, plus they are very small fry so won't get much of a discount on the RETAIL price. They never get a sniff of buying gas/electric at proper wholesale prices so your theory is redundant, I'm afraid...

KimYeovil

DGJsaver wrote: »

Link please Kim , i know about the £400 one off payment....?

That's the Pension Credit guarantee.

http://www.thepensionservice.gov.uk/pensioncredit/

(Okay, 'entitled to a means-tested income of £500 per month', not 'entitled to £500 per month'.)

AndysDad

oldwiring wrote: »

So you think the energy cos go out and buy their requirements every day like an old fashioned housewife then, If they did the prices to you would be up and down like a prostitutes bed springs. Most is bought some time in advance, so there will always be leads and lags in price changes compared to the spot market.

I think its like a 'Rachet' it only goes up and never comes down.Not quite sure why Mr Brown ducked out of imposing the Windfall Tax.

Cardew

AndysDad wrote: »

I think its like a 'Rachet' it only goes up and never comes down.Not quite sure why Mr Brown ducked out of imposing the Windfall Tax.

They stated that the reason was that a windfall tax would simply be paid for by us, the customers, in increased prices.

A windfall tax of £1 Billion of £100 Billion if we want to be silly, and they will raise the extra revenue from - you guessed!

Other than take the Utility companies back into public ownership, what can the Government do; even assuming that the utility companies profits are excessive - which they ain't!!!!

I know that it isn't what a lot of people want to hear, but the Utility company profits are not high in percentage terms and are measured in £10s per customer per year.

There really is a misconception that Utility company profits are the reason for our high energy prices.

So the alternative, from a windfall tax, of changes for pre-pay customers and Electricity only customers(justified or not) will simply be paid for by cross-subsidy in our tariffs.

Why not a windfall tax on, say, Tesco? who have much higher profits.